Business strategy is like religion. Everyone's got one, and for many it doesn't translate to daily practice.
You read about business strategy, have a favorite book and model, but unless you're seeking funding, chances are that you're operating without a current, actionable business plan, much less a marketing strategy. This leads to:
- Opportunistic growth (changing direction based on the latest trends and opportunities)
- Out-of-balance business mix (too much revenue from one customer or industry, increasing risk)
- Higher operating cost / lower margins (lost productivity and increased busy work, firefighting)
You already know it's important, and have strong beliefs on what it should look like, but may still not have one at hand that's useful to you and your team's daily work. Why not? Its importance and gravity move it down the priority list. Many procrastinate because they think a good business plan requires:
- Time. Companies spend days at expensive off-sites and still do not have an actionable plan.
- Bulk. Throw-weight doesn't help it get in use. Actually, it can prevent you from taking the next step.
- More bodies. Collaborative ideas and buy-in are needed, but in many companies this translates to cut-and-pasting individual work plans together for a plan that lacks cohesion and forward direction.
Equal opportunity problem
This is certainly not a small business problem. Large companies undergo months-long planning cycles, tie multi-million-dollar budgets to them, and still do not have a way to translate that into action plans for the important, day-to-day work at hand.
My team at PLS Launch Solutions has worked to create and execute strategic plans with Fortune 50 C-level leaders and with startup entrepreneurs. Here’s what I've learned:
- Leaders set the vision. Great managers tie employees' daily work to their impact on that vision.
- Keep it simple. Whatever your planning process, the speed and simplicity of the one-page-business plan gives you something to communicate with your team, partners, bankers, and other stakeholders.
- Narrow your time horizon. Concentrate on this year, working toward a 3- to 5-year vision. Anything more is science fiction.
Socializing strategy
A recent McKinsey article discusses the benefits and downfalls of the latest trend in strategy development, crowdsourcing, or broadening the pool of input in determining strategy. While this trend started with a natural, Wikimedia, the technique has been used by global technology companies like 3M and HCL Technologies.
Socializing your business plan gives you a broader perspective and helps break free of thinking inside the box. McKinsey suggests that companies are wise to:
Use it only to round out the toolkit. Crowdsourcing won't help when a radical change in direction is needed, or help executives make tough tradeoffs. At PLS, we use customer surveys and customer interviews to verify a company's position and strategy--not to create it.
Identify how they’ll kill bad ideas. Broad input, inside and outside your company, will certainly give you a volume of ideas. Leaders need to qualify and vet ideas, so that real progress can be made with limited resources. Set decision gates before you start.
Avoid groupthink. A timeless leadership challenge: how to generate productive debate. Some groups in live meetings use poker chips to ask their teams to allocate resources among ideas.
In helping leaders of optics and photonics companies to set marketing strategy, we use a rapid planning model to put a business plan in place, gather customer inputs with surveys and interviews, conduct competitive research, and assess your brand strengths.
These inputs are used to set a company or product's position. This level of strategic development, the product or company positioning, is where we see the best use of broader inputs. A brief, half-day workshop creates the most buy-in and collaboration for the least amount of time away from operations. Higher-level and more drawn-out cross-functional engagements do not significantly improve results.
Setting a company's positioning, or "sweet spot," is the best place for broader collaboration.
However you create a strategic plan, it must be:
- Actionable
- Accountable
- Measurable
